“Last year was a good one to be a federal contractor because of the pandemic and a few other things. Federal contract spending went up by double digits. And there were a few changes to the list of the largest federal contractors. Federal Drive with Tom Temin got the highlights from Bloomberg federal market analyst Laura Criste…”
“Laura Criste: Yeah, so in fiscal 2020, it was a record high spending of $682 billion, which is pretty crazy, just comparing it to the previous year of $599 billion in fiscal 2019. As you said, a lot of that was due to COVID. But we can talk about some of the other trends as well.
Tom Temin: Yes, COVID. I think we understand a lot of the spending, and it was all over the place. Were there any other factors driving that, though last year?
Laura Criste: Yeah. So two areas that we really like to concentrate on at Bloomberg Government are IT and professional services. And both of those markets would have probably grown in fiscal 2020, compared to 2019. Historical trends showed they would grow. It’s a little hard to kind of completely decouple COVID spending and regular market spending. But just based on what we saw going on in both of those markets, I think both of those would have continued with IT in particular, with COVID, we saw more increases in like remote work-type spending. So that was going to be hardware and security. But we also saw things like IT modernization spending increasing, which very likely would have continued increasing, even without COVID.
Tom Temin: And which agencies accounted for the single biggest increase in spending?
Laura Criste: So top agencies are going to be HHS, which is mostly going to be COVID. We’re going to talk about that a lot I think, even though people are tired talking about it. VA spending went up and that was not necessarily because of COVID. There’s a big contract called Patient-Centered Community [Care] with TriWest. They provide medical services, and it wasn’t all COVID. VA increased about $3 billion because of the pandemic. But overall, it increased more like 10. So we saw some increases there that weren’t pandemic-related…” Read the full interview here.
Source: If you thought federal contract spending shot through the roof last year, you’re right – By Tom Temin, June 22, 2021. Federal News Network.
